Detroit bans Bobby Ferguson from doing business with the city

Detroit — The city's Office of Inspector General has caught Bobby Ferguson attempting to do business with the city of Detroit following his release from prison and banned him from doing so until at least 2033.

The office's investigation found that Ferguson, who was convicted of extorting millions of dollars in city contracts a decade ago during former Mayor Kwame Kilpatrick's administration, opened a business in the city after his release from prison in 2021.

In 2013, Ferguson was convicted of nine felonies, including racketeering, extortion and bribery related to Detroit contracts. He served eight years of a 21-year federal prison sentence and was ordered to pay restitution to the Detroit Water and Sewerage Department totaling $6.2 million. Ferguson was released in April 2021 with oversight restrictions and soon after established the Ferguson Group V, LLC.

The inspector general's investigation began Dec. 18. The OIG's report does not explain what businesses the Ferguson Group was involved in, but indicates he tried to involve himself with outside contractors.

"The OIG was also informed that Mr. Ferguson approached a high-ranking City of Detroit official about potentially getting a contract with their department," according to Inspector General Ellen Ha's office.

Ferguson's debarment, or ban from city business, was backdated 20 years to the time of his conviction starting on March 11, 2013, with an end date of March 11, 2033. The debarment prevents Ferguson from serving as a subcontractor or as a goods, services or materials supplier for any contract for the city. Ferguson still owes $2.6 million to the water and sewerage department, the OIG said.

At the time of his conviction, the city had no means to ban Ferguson from doing business with the city. A 2018 city ordinance was implemented to give the OIG power to debar contractors from current and/or future work. The period of debarment follows with the seriousness of the cause but cannot exceed 20 years. There is no statute of limitations for investigations.

A list of all contractors debarred by the City of Detroit is posted on the city’s website. It was updated Tuesday to include Ferguson.

"Additionally, because Mr. Ferguson, as an individual is debarred, no company he owns, is an officer for, or has a direct or indirect financial or beneficial interest in may do business with the City of Detroit as a contractor or subcontractor for the period of debarment," according to the OIG's report.

Ha stated that her office was established in response to major corruption in city government due in part to city contractors like Ferguson.

"We have a clear and direct mandate to hold contractors accountable and prevent those who would violate the trust of the citizens by illegally benefiting from taxpayers' hard-earned dollars," Ha stated in a release Tuesday. "In this debarment, as in all debarments that we have conducted to date, we are fulfilling that mandate."

Ferguson in November complained to a federal judge that the city of Detroit canceled $1 million worth of clean-up contracts awarded to his daughter's company called Staffing Equipment Evolution. The contracts were canceled in October after the city staff member flagged Ferguson's involvement. A federal judge denied Ferguson's bid to be released from court oversight.

The OIG stated it could not reach Ferguson for administrative hearings on the matter. The Detroit News was also unable to contact him.

Kilpatrick was elected in 2001. During his tenure, he and Ferguson ran an "unprecedented extortion scheme which targeted local businesses seeking city contracts," according to the inspector general's report.

In 2002, Ferguson approached Lakeshore Engineering, a small minority-owned firm, after it was awarded a $10 million DWSD sewer contract. Ferguson, who was aware that the then-mayor still had to sign off on the deal, told a member of Lakeshore’s leadership that he wanted 25% of the contract. However, Lakeshore refused because theyalready had a team in place.

After Ferguson’s threat, Lakeshore offered Ferguson 10%, which he refused. Ferguson then had Lakeshore’s $10 million contract canceled. Shortly thereafter, Ferguson also had another $5 million Lakeshore contracts canceled. Fearing additional reprisals, the next time Lakeshore bid on a city contract, Ferguson was included on the team and the company was later awarded $20 million DWSD contract.

In 2002, Ferguson had bad dealings with Inland Waters Pollution Control, which had been properly awarded a $50 million sewer clinging contract, and leveraged his relationship with the mayor.

The same thing occurred in 2007 with Walbridge Alinger, a construction firm, which was the lowest bidder for the $75 million DWSD Baby Creek/Patton Park contract. This partnership resulted in over $13 million in revenues going Ferguson’s companies, according to the inspector general's report. Ferguson also attempted to extort Walbridge in a $140 million DWSD Oakwood pump station contract. Walbridge refused and was not awarded the contract.

"Mr. Ferguson’s actions also impacted the residents of Detroit who paid inflated costs for the city services that he manipulated to his advantage," according to the report. "Ferguson routinely caused contracts to be awarded to companies who were not the lowest qualified bidder."

srahal@detroitnews.com